Not many of us would buy a new car having only read the brochure and looked admiringly at it across the showroom floor. Most of us would probably read all the articles we could find in independent motoring magazines, take it for a test drive and speak to friends and neighbours who have similar models.

Why then when it comes to recruiting senior staff, do so many people only read the glossy brochure (CV), listen to the sales presentation (interview) and then write out the cheque? Of course, I'm exaggerating to make the point, but all too often sourcing independent views (referencing) is done inadequately, if at all.

The value of referencing should be clear – what better way of gaining a fuller understanding of a potential recruit's abilities and style than checking with previous employers how he or she has performed for the last few years.

Of course referees can have their own agendas and their remarks need to be put in context, but generally speaking their “agenda” is less biased than that of the candidate.

Minimise the heartache

A couple of minutes reviewing these points could save a great deal of heartache later. Aren't references a bit like a homebuyer's report when purchasing a new house – an annoying formality after you have fallen in love with the new purchase? Also, like the recent property market you may have become convinced that to secure a hot property you have to move quickly, take a risk and go with your heart.

Well, estate agents will love you for taking off their hands those hot properties that have some underlying, less obvious, defects beneath the surface sheen.

Referencing should not be viewed as an administrative chore at the end of the interviewing process. It is a key part of recruitment and you might want to make that clear to potential candidates from an early stage.

In the public sector it is normal for candidates to be very open to their current managers about applying for new positions. Striving to move on and stretch oneself career-wise is viewed positively and references are frequently sought, and offered, at very early stages of the process. Therefore referees' remarks can play a key part in early decision making. Difficulties sometimes arise when a public sector organisation is looking to bring in new commercial expertise from the private sector, and expects such candidates to allow access to referees at an early stage.

Calling the shots

In the private sector referencing is normally left until after a conditional offer has been made and the candidate therefore feels sufficiently confident to declare his hand. Herein lies a good deal of the problem – by this stage the candidate feels that except for any disasters the job is theirs, and the new employer has quite likely got to the stage where there is only one candidate left in the running, potentially affecting evaluation of the evidence.

Unfortunately, there is little that can be done about the timing issue with formal references, but if you have gained access to the candidate through a recruitment search then there will be the informal references given by sources to your search consultant (although these comments may have been made in strict confidence).

Surprisingly, candidates are very often allowed to call the shots as to who their referees are going to be. Clearly, the candidate would normally be expected to suggest referees, but as the potential employer you, or your recruitment consultant, should have thought through who is most likely to be able to provide the depth and currency of information that you are after.

Normally this can all be done with a very light touch, but over the years I have known candidates suggest various reasons why one shouldn't contact their previous boss including, “she doesn't speak any English”. Don't believe it, and if she genuinely only speaks Arabic then find somebody at your end who is an Arabic speaker. Personal references are normally to be avoided; after all we want to know how the candidate performs at work, not what a cheerful chap he is in the golf club on a Saturday afternoon.

Properly undertaken referencing not only provides the evidence to confirm a conditional job offer, but can supply valuable information on how to manage, or interact with, the new appointee in his or her first few weeks. Most would agree that holding a conversation with a referee either by telephone or possibly in person is the most effective way of gaining a really richer picture of the candidate. Unfortunately an increasing number of companies now have policies forbidding line managers to give verbal references and requiring the human resources department to take the lead in providing a written reference – normally driven by legal concerns.

Whether the reference is given verbally or in writing you should approach it with a clear view of the areas upon which you need to gain information, and why they are relevant to the role under consideration.

It is particularly important to understand the legal situation applying to references, both in case you consider that the references you have received on a potential recruit are unsatisfactory, and to avoid legal comeback on references that you give.

A couple of recent cases are worth looking at. First, a bank was found to have broken its obligation of trust and confidence towards an employee, by providing a reference that made note of complaints against the staff member, but contained no assessment of the employee's character or ability.

An Employment Appeal Tribunal took the view that the employer was at fault because the reference had been biased towards one area of the employee's performance and was not therefore “full and fair”.

However, as if to prove that this is an area that will keep lawyers fully employed for some time yet, a second case appears to muddy the waters. A self-employed financial services agent complained about one of his references, which set out details of complaints from clients, but did not address areas such as his sales record. Here the court concluded that there is no requirement for employers to make sure that references are full, fair and comprehensive. Rather, the employer's duty is to take reasonable care not to give misleading information, such as by selective inclusion or expressing facts or opinions in such a manner as to give rise to false or mistaken inferences in the mind of a reasonable recipient.

The bottom line is to be careful when giving references, particularly if the employee has put in a less than sparkling performance, and you would also probably be well advised to call your lawyers before reacting to any poor references received on potential recruits.

Referencing is important and should be carried out with diligence and care. If your new car doesn't live up to the brochure, then you will probably take it back to the dealer. If your new home is harbouring some problems beneath the surface, then you can probably off-load it when the market hots up again. But if the new finance director turns out to be not as advertised – now that could really cost you.

  • Tim Latham is the principal of Director Resourcing; a London-based search and selection consultancy

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